The tone of your comment suggests disagreement, but the meat of it is in full agreement with my earlier comment, so much so that yours can be thought of as a more fleshed-out version of mine.
>> There are only a handful of lenders playing at this level...
> The area where there are only a handful of "players" is lending to countries that are very high credit risks. And for good reason. What rational investor would lend money to a party clearly unable to pay it back? None. That's a death wish...
>> ...and they are mostly driven by politics, not profit.
> Except of course when governments guarantee that party's credit for political reasons
Your reference to lenders began with: "You are assuming perfect competition in the area of loans to nation-states," and you said "there are only a handful of lenders playing at this level." I disagreed because this is untrue, and suggested your comment may only be accurate in reference to countries representing very high credit risks.
Regarding politics and profit, we disagree here as well. Yes, I referenced political reasons as motives for lending to these very high credit risk countries, but it's not mutually exclusive. I believe if you dig into that political motive you will find a strong profit motive. Maybe the "State" isn't motivated by profit, but often the people who exert power over the State are. What else would they be motivated by? Doing good for humanity? Please...
>> There are only a handful of lenders playing at this level...
> The area where there are only a handful of "players" is lending to countries that are very high credit risks. And for good reason. What rational investor would lend money to a party clearly unable to pay it back? None. That's a death wish...
>> ...and they are mostly driven by politics, not profit.
> Except of course when governments guarantee that party's credit for political reasons